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Incentive Zones & Tax Credits

Enterprise Zone

Nearly all of Tracy’s commercial and industrial properties are located within the San Joaquin County Enterprise Zone. The Enterprise Zone program targets economically distressed areas throughout California, providing special incentives designed to encourage business investment and promote the creation of new jobs. The purpose of the program is to stimulate development by providing tax incentives to businesses and allow private sector market forces to revive the local economy.

Research and Development Tax Credit (CA Franchise Tax Board Business Tax Credits)

The California R&D Tax Credit offers a permanent tax credit for qualified research expenses incurred while conducting qualified research in California. Designed to encourage companies to increase their basic research and development activities in California, the R&D tax credit allows companies to receive a credit of 15% for qualifying in-house research expenses and 24% for basic research payments to an outside company or university. Qualifying expenses include:

Employees wages for researchers, supervisors and support services

Supplies used in conducting the research

Amounts paid to outside consultants for the right to use personal property for research

California Alternative Energy & Advanced Transportation Authority (CAEATFA) provides eligible projects financial assistance in the form of a sales and use tax exclusion on the purchase of zero-emission vehicle and clean technology manufacturing equipment. Businesses must apply for the tax exemption and receive approval through the CAEATFA Board. This program will sunset in 2020. More information and applications are available at: www.treasurer.ca.gov/caeatfa/sb71/index.asp.

New Jobs Credit

A temporary incentive, this credit is for small businesses that create jobs in the next two years. Employers that began the year with 20 or fewer employees could claim a $3,000 credit for each full-time employee hired. California allocated $400,000,000 for this tax credit. Taxpayers may only claim the credit on an original timely filed return received by the FTB on or before a cut-off date specified by FTB. The cut-off date is the last day of the calendar quarter within which FTB estimates it will have received timely filed original returns claiming the credit that cumulatively total $400 million.